All New Cars Sold In The U.S. Will Cost More If The Administration Imposes An Auto Tariff.

That's because every car sold in America is at least partly imported.The Commerce Department is considering tariffs on cars assembled at foreign plants and on foreign-made auto parts. Every car assembled in the United States contains a significant percentage of foreign parts, according to government data. "There are no purely American vehicles," said Michelle Krebs, senior analyst at AutoTrader. "These are global automakers who use global sources for all types of parts." Automakers are already warning that tariffs would raise their costs, in some cases by thousands of dollars per car. General Motors said last week that it could be forced to cut jobs. US regulators track how "domestic" every car is by measuring the percentage of each vehicle's parts and manufacturing that comes from either the United States or Canada. According to that measure, the two most "American" cars are both Hondas — the Odyssey minivan and Ridgeline pickup. Three-quarters of each vehicle's components are made in the United States or Canada. The Honda Civic, Acura MDX, Acura TLX and the Mercedes C-class source 70% from the United States and Canada. The highest-ranked car made by a Detroit automaker is the Chevrolet Corvette, which placed seventh. About two-thirds of its parts and manufacturing are from the United States or Canada. The only automaker that builds all its American cars at a US plant is Tesla (TSLA). But even Tesla imports roughly half the parts it uses..

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So, as usual, consumers and workers are the losers. All these tariffs will costs thousands of jobs. Just ask the workers at Harley plant in KC. See how they feel now... HD is just the first. Other companies will follow. As car prices rise, demand fall and this will lead to more job loss.

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That's because every car sold in America is at least partly imported.The Commerce Department is considering tariffs on cars assembled at foreign plants and on foreign-made auto parts. Every car assembled in the United States contains a significant percentage of foreign parts, according to government data. "There are no purely American vehicles," said Michelle Krebs, senior analyst at AutoTrader. "These are global automakers who use global sources for all types of parts." Automakers are already warning that tariffs would raise their costs, in some cases by thousands of dollars per car. General Motors said last week that it could be forced to cut jobs. US regulators track how "domestic" every car is by measuring the percentage of each vehicle's parts and manufacturing that comes from either the United States or Canada. According to that measure, the two most "American" cars are both Hondas — the Odyssey minivan and Ridgeline pickup. Three-quarters of each vehicle's components are made in the United States or Canada. The Honda Civic, Acura MDX, Acura TLX and the Mercedes C-class source 70% from the United States and Canada. The highest-ranked car made by a Detroit automaker is the Chevrolet Corvette, which placed seventh. About two-thirds of its parts and manufacturing are from the United States or Canada. The only automaker that builds all its American cars at a US plant is Tesla (TSLA). But even Tesla imports roughly half the parts it uses..

Tariffs are taxes, regressive taxes that have the greatest impact on low income people. Happy Mid Term Day

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One of the reasons that General Motors has a difficult costing profile to their parts is their corporate attitude to procurement. Before the bankruptcy, a plant of mine sold parts to a supplier to GM. I was issued a print and asked to source the tooling and manufacture the part, which went into another group of parts that were buried deep down inside the engine compartment. OK, so we did that and were shipping the stuff to the sub-assembler for GM.

I inquired as to their quality-control ("QC") checks and how the parts qualified. I was informed that GM did not do QC on incoming purchased parts. WHAT??!! Why was that? It turns out that the Company was managed by lawyers, and even the President was a lawyer. (Note that the Presidents of Honda and Toyota are engineers.) And as lawyers, they concluded that if they did inspection, then they waived the right to go sue the supplier if some fault was found later on, and the parts had to be removed and replaced under warranty or USDOT Order.

In other words, I could go build a part and sell it for a few pennies' profit, and if anything went wrong, in its interface with other parts of which I have never seen and have no knowledge, then they would come after me for say $150 a car to bring them in to some dealer, dig apart half the car, and replace the part with someone else's part. On that information, I halted production, removed the tooling, crated it up, and shipped the tooling to the sub-assembler. Hey, you go find someone stupid enough to put his entire company on the line for some parts that earn some pennies; it won't be me.

Real smart company. No great wonder it went bankrupt. That is the most profoundly stupid procurement policy I have ever run across. Only a lawyer could dream that one up. [My guess is that GM would have trouble suing and collecting on some court claim in say China, so those guys don't mind making parts, not much realistic risk.]